Starting up a brewery on a budget

Compared to another "what's your top 5 IPA/BA Stout/etc" thread, this is downright refreshing.

 

volunteer at a local brewery for a year while you save more money from another job. See if you like the work, then check your bank account and perhaps continue volunteering for another year just to be sure. then after year 2, if you have the funds and still have to open this brewery, have a solid business plan, a brewery location, equiptment you wantm hop and malt contract and a way to sell your product, and another pause to consider all of the above, then take the plunge.
Best of luck. Brewing is hard work and super competitive.

 

With 10K might want to think about gypsy brewing.

 

For a 7bbl brewery I'd say you're looking at more like $100-200K depending where, construction involved, etc.

 

Umm...not to burst your bubble bud, but $10k won't even pay for lawyer fees, let alone an architect and GC who know up-to-date codes for telling if your location is even feasible to start a brewery.

Figure at least $150k for equipment, $10k for lawyer, $20k for architect, a couple grand for licensing/permits, and about $250k for buildout if you want a taproom (I'm being conservative with these numbers).

Source: am starting a 7 bbl brewery right now.
If you're serious about this, feel free to beermail with me, and I can tell you what to expect.

 

Small business owner here-I cannot over emphasize the importance of a business plan. Most of these posts are spot on.Pretend you have that 10K and 'cold' start your business.You would be surprised how much money you will spend before you see one drop of beer.
Now some encouragement...Every beer you've ever had started with a 'dream'...some of the best beers in the world were enjoyed by a homebrewer long before they made it to market for the rest of us.
There will be a moment..a point of no return when you just go for it;whether it's signing a lease,quitting your job,or making that first equipment purchase. I say go for it and good luck!

 

I know that you can spend a good % of your $10,000 budget setting up a home based business that doesn't require nearly the level of equipment or permitting that a brewery does, so your budget seems very light. Whatever you do, please be very careful of loans, although as you state you are a student, it would be virtually impossible to obtain a substantial one without someone willing to back the loan on your behalf, which might be awkward for family or friends if they were asked. Also, and not to discourage you, but every business-and brewing is a business-reaches it's short term saturation point. In Toronto, where I once lived, the old saying about real estate was that when all you saw was construction cranes, it was time to sell. Brewing is no different. If everyone thinks it's a good idea (4000 U.S. breweries now), a pullback is imminent. Get some experience, save some money, and wait for the coming dust to settle. JMO. Best of luck.

 

I know some folks who are in the process of doing this, and their budget is a couple of orders of magnitude higher than this.
The other thing is that you need to have some beers that stand out. The brewery with a golden ale,pale ale, IPA and some kind of stout or porter just does not cut it any more.

 

Missed the edit window.
Here's a just a peak into the process.

I'm really not trying to be discouraging, just trying to give you a realistic picture. Again, I'm more than happy to discuss and let you know what you can expect.

 

No matter what you decide to do - don't half-ass it. Nothing is more depressing (and frustrating) than some poor sap who is trying to live out a dream of being a brewer and doing a poor job due to cutting corners.

While not very sexy, I've always liked Shaun Hill's approach. Take care of your brewing chops first.

 

You know, my initial thoughts were unusually negative - maybe realistic but still... I just thought of Austin Street - when we were up in Maine this summer we stuck our head in the door and they didn't seem to have much in the way of permanent equipment. My wife and I both went "that's it???" Another smallish outfit was Bunker - he's literally in a bunker, but has more gear installed. I'd still guess, based on what I know of equipment prices, that he's north of $100K, but since he reclaimed and "up purposed" a defunct building the investment in that regard might be advantageous.

When I first visited the farm brewer who works here, we talked a lot about the beer and how many full batches he dumped and how many hundreds of practice batches he made to perfect his formulations. And he'd already won gold medals - pretty sure he won one of the Boston Beer contests as well. I think that consistency in the beer itself is critical. He even has a cell counter so he can accurately pitch his yeast - says it was one of the best equipment investments he's made and I've seen much bigger outfits that don't have one. Another thing he did - he runs all his fermentation at the same temperature, so he's selective about what he brews. Rather than control temperature independently on four fermentation vessels, he can control the room temperature. Again, this promotes his consistency with less cost. So can you nail the same beer every time? Then can you successfully scale it up, which isn't always the easiest thing to accomplish. There are things you don't see in a five gallon batch that can bite hard at larger scale. My work in R&D involves scaling up from concept to production volumes - it can be a nightmare.

Decent equipment is certainly important. It doesn't have to be new, but don't discount new, either. Sometimes it is cheaper than what you have to do to make used useful as a found out yesterday looking for a jacketed 30 gallon tank. I saved about $1500 by spending a couple hours searching new versus salvage. By the time I rehabbed the used vessels I was offered, that differential would have grown even more. (And somebody mentioned welding stainless - find a fabricator who can do sanitary welds. I'm in the food industry and I've seen a lot of bad stainless welding that harbors unwanted critters where you'd least expect to find them.) Maybe there's equipment from available used that is ready to go - somebody that has expanded (or given up) recently and is selling their smaller scale gear. Pennies on the dollar is a good thing as long as you fully evaluate it as total cost - refurbishment can get expensive. Just for fun, here's a good source of tanks and vessels: http://www.glaciertanks.com/

There's a new brewery venture opening up in Providence, RI that is essentially a brewing co-op. Several brewers and investors have joined forces to share the capital expense and centralize the operation. While it interests me to see this model, I have kind of lost track of their progress. Last I knew it had run afoul of some permitting issues (and one larger investor/partner had backed out again), but may be back on track. Maybe there's something useful here http://www.islebrewers.com/ Maybe if you contact them (there are quite a few people involved) someone would be willing to discuss their business plan and concept.

 

Eh, I don't want to pile on too much, but I really do agree with the general sentiment that you need to plan for more money. I started a business while I was in college, involving consumer products. Not beer, but they are fairly analogous.

We started on a fairly tight budget, and you will find that it is difficult to get much traction for a long time. It took years before we even turned a modest profit.

While you may be able to get the startup costs, I think many first time business owners don't give themselves enough of a cushion for operations in the beginning. My main advice would be don't jump into it as soon as you have just enough to start operating. Make sure you have extra for the inevitable issues that come up.

I think you'd be much more likely to find success by being a little patient in getting started.

 

Second the earlier post of considering kickstarter in terms of funding, several local breweries have opened up in our area over the last year or so using it. Seems to have worked out.

 

Kickstarters are good ways to "top up" your investment, enough to buy initial kegs, grains, etc. Cash flow up front to help you launch, pay your first two weeks of staffing costs. Just thinking, this is a good way to look at something like this. Founders clubs too are a great way to go about it.

 

Hope you like working 24/7 with no sleep with just you two

 

Contract brewing to start?

 

After all of the trails and tribulations to reach the point of opening your brewery, DO NOT open that front door unless you know from independent knowledgeable sources (meaning not you or your friends) that you will be serving good to above-average beers. If you serve marginal beer, and if word gets around (and it will get around), you're probably done. It's that critical.

 

You're in CT? Check out Steady Habbot. He just started up not too long ago on a small system. Maybe they can give you advice.

 

7 barrel system, I would want $500,000 of capitol and I would not be taking out a loan for all or most of it.

 

My advice is work for someone else who is opening a brewery and learn from their mistakes. It's a lot cheaper, especially if you're on a budget.

 

A brewery in Seattle, Schooner Exact, started as a half-bbl brewery in a storage unit. They would come in at night, after they finished at their days jobs. Now, they've got a very nice facility, brewery and pub, but it's been a long , hard road. $10,000 is nothing, unless you start as a Nano, and build up from there. Or, save your pennies until you've got $75-100k.

A brewery in my town that should be opening soon bought a 7bbl system, brand new, from a Chinese source. $70k right there, and it was the cheapest complete system they could find. Finish was rough on all the equipment, welder had to spend lots of time re-doing work.

Again, unless you are willing to start Nano sized (1/2-1bbl) and work out of a small space, $10k is just wishing money.

 

Take baby steps. Follow much of the advice posted and home-brew, home-brew, home-brew and home-brew some more.